Senate Democrats


Call for new direction from economic policies that have put American families at risk

Washington, DC — After five years of Bush Republican leadership, America’s middle class now finds itself squeezed between rising costs and stagnant wages. Today, Democratic Senators Paul Sarbanes, Jack Reed, and Ken Salazar demanded a new direction for hard working families across the country. Appearing with Elizabeth Warren, Harvard professor and author of “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke,” and Jenny and Andy Lewis, parents struggling with rising health care and educations costs, the Democrats called for a change to new policies that will create better jobs at better pay, affordable and accessible health care and education, and an ease to the middle-class squeeze.

Despite the rosy rhetoric from the White House, the reality is President Bush has the worst job creation record of any President since Herbert Hoover. A new report prepared by Professor Warren to update her landmark book, “the Two Income Trap,” brings home just how difficult conditions have become. According to Increasing Pressure on the Middle Class, “Never before have middle class families worked so hard just to break even. The typical two-parent family now has both mom and dad in the workforce, even if the children are small.” In the last five years, American workers have seen their incomes increase at best only a little and at worst not at all. Costs, by contrast, are skyrocketing. Housing costs, the single biggest expense for American families, have risen 23% in the last five years. Health insurance costs have rising by 71%. College costs are up 44%. The Do Nothing Republican Congress has failed to act, and Democrats think it’s time for a new direction.

“Middle income Americans have worked to make this a highly productive economy, but for the last six years they’ve failed to share in the gains,” said Senator Sarbanes. “As Professor Warren explains, the costs of essentials for middle class prosperity have risen much faster than the incomes of the typical American family. The policies of the Bush Administration and the Republican-led Congress have made things even worse for middle income Americans – showering tax benefits on the rich while putting health care and college out of reach for many in the middle class and threatening their retirement security.”

“The strength of the economy should be judged by the progress of its people. The President’s policies have simply not produced broadly shared prosperity or greater economic opportunity for most families,” said Reed, the ranking member of the Joint Economic Committee. “The President and his party are out of touch with the experience of most Americans. Higher prices for gasoline, college education, and medical care are squeezing the take home pay of millions of middle class Americans. Slow job growth and stagnant wages during the Bush administration have left too many families with lower incomes and contributed to the growing number of Americans without health insurance.”

“Today’s study is a sobering look at the economy of the last several years,” said Senator Salazar. “Employee pay is down, CEO payment is up; the minimum wage is frozen, and while tax breaks for millionaires are up, middle class tax breaks remain paltry. It is time for the priorities of this nation to be in line with the needs of its people.”

“I wish I could say that the middle class American family has turned a financial corner, that it is now regaining its economic footing. I cannot,” said Warren, the Leo Gottlieb Professor of Law at Harvard Law School. “The numbers are unambiguous. The middle class American family is caught in an economic vise­, squeezed by flat earnings on one side and increased expenses on the other.”

Hard working Americans are struggling to keep pace with the cost of living, but President Bush and the Do Nothing Republican Congress have not worked to help. Instead, the legislative calendar of the 109th Congress has been filled with less-than-pressing issues like the Schaivo affair and Constitutional Amendments to ban gay marriage.

“Under this Administration, we’re seeing our own economic position stagnate while we hear about tax cuts for the top one half of one percent of income,” said Andy Loomis, who’s struggling along with his wife to make ends meet for themselves and their family. “I find it astounding that we are being pressed from every direction financially with no help from the Bush Administration. We think about our child’s education costs, our own out of pocket health care costs, how to get to our daughter’s school or to work with record gas prices. I just don’t know how most families are doing it.”

Democrats believe it’s time for a new direction, and have offered a comprehensive agenda to finally make government work for all Americans. With the middle-class struggling, it’s time for a new commitment to better jobs at better pay, more affordable and accessible healthcare and education, and a secure retirement for all.